MELLODY'S TAX TIPS
Feb. 14, 2005
Mellody Hobson, "Good Morning America's" personal finance expert, offered the following "Takeaway" tips on how to make filing your taxes easier this year:
1. Take Advantage of Simpler Forms: Form 1040EZ or Form 1040A may be right for you. Choosing the correct tax form not only saves you time, but can also save you money -- so evaluate your current situation carefully.
2. Avoid the Paper Chase: To minimize the painful process of completing your tax return, take the time now to gather all of the necessary paperwork. For a list of what the IRS suggests you have ready when filing your taxes, Click Here.
3. File Electronically: Two of the most important benefits to filing electronically are quicker refunds and fewer errors. Specifically, on average, e-filers get their refunds in half the time of regular filers, and if you e-file and use direct deposit, you can receive your refund in approximately two weeks. In addition, e-filers have a less than 1 percent error rate because the computer software automatically checks your math.
4. Maximize Free E-Resources: The IRS offers an excellent and easy-to-use Web resource for taxpayers, "1040 Central," an online tax tool that helps you prepare your taxes more efficiently. You can also learn more about e-filing and link to "Free File," which enables you to file your taxes online using free tax preparation software. TurboTax for the Web, Taxact.com and eSmartTax are three of the available providers from which you can choose.
5. Refuse Refund Anticipation Loans: Refund anticipation loans may be a good deal for the tax prep company, but not for you. These are loans, meaning you will pay interest and probably several fees, so you should do the math before you take that loan.
6. Avoid Common Mistakes: The most common mistakes include miscalculation of earned income tax credits, writing down incorrect Social Security numbers and forgetting to sign your name.
Click here for more advice from Mellody Hobson.
Mellody Hobson, "Good Morning America's" personal finance expert, offered the following "Takeaway" tips on how to make filing your taxes easier this year:
1. Take Advantage of Simpler Forms: Form 1040EZ or Form 1040A may be right for you. Choosing the correct tax form not only saves you time, but can also save you money -- so evaluate your current situation carefully.
2. Avoid the Paper Chase: To minimize the painful process of completing your tax return, take the time now to gather all of the necessary paperwork. For a list of what the IRS suggests you have ready when filing your taxes, Click Here.
3. File Electronically: Two of the most important benefits to filing electronically are quicker refunds and fewer errors. Specifically, on average, e-filers get their refunds in half the time of regular filers, and if you e-file and use direct deposit, you can receive your refund in approximately two weeks. In addition, e-filers have a less than 1 percent error rate because the computer software automatically checks your math.
4. Maximize Free E-Resources: The IRS offers an excellent and easy-to-use Web resource for taxpayers, "1040 Central," an online tax tool that helps you prepare your taxes more efficiently. You can also learn more about e-filing and link to "Free File," which enables you to file your taxes online using free tax preparation software. TurboTax for the Web, Taxact.com and eSmartTax are three of the available providers from which you can choose.
5. Refuse Refund Anticipation Loans: Refund anticipation loans may be a good deal for the tax prep company, but not for you. These are loans, meaning you will pay interest and probably several fees, so you should do the math before you take that loan.
6. Avoid Common Mistakes: The most common mistakes include miscalculation of earned income tax credits, writing down incorrect Social Security numbers and forgetting to sign your name.
Click here for more advice from Mellody Hobson.
